(1) Explain your problem, don't simply post "This isn't working". What were you doing when you faced the problem? What have you tried to resolve - did you look for a solution using "Search" ? Has it happened just once or several times?
(2) It's also good to get feedback when a solution is found, return to the original post to explain how it was resolved so that more people can also use the results.
Dear all,
I would like everybody to comment on my approach for planning travel costs of the project. May be you can suggest something better.
If say I have a project, which would last for a year (a critical path). I know that this project would occupy Project Manager (PM) for pretty much 100%. I also know, that this project manager would travel to the customer in average every 4rth week (so, in average 25% of his working time). I also know his travel expenses for a week (say 2000 USD). I also assume, that PM would book 40h on a project per week.
What I do is I calculate so-called effective hourly rate of PM. Say his standard hourly cost is 100 USD /h. Then his effective hourly cost (taking account travel cost) would be:
100 +25%*2000/40=112.5 USD/h.
Then in MS Project I assign the Std. Rate of PM to be 112.5.
After that I create a task, which runs through entire project duration, called PM Work and then I assign PM resource to this task for 100%.
The same I do with other resources. But for instance a Field Engineer, who I know is always travelling, would have a higher increase in hourly rate.
100+100%*2000/40=150 USD/h
The advantage of such approach is that when I assign resource, his travel expenses get calculated automatically depending on duration of a task.
Of cause alternatively I could create a material resource called, “Weekly travel cost” and then I would assign certain amount of material resources to a task, but it will not be automatically calculated any longer. I actually use such approach for small projects, where I can exactly calculate amount of travel needed (say 2 customer visits). But for large projects, I am always using the statistical approach (effective hourly rate).
Or I could just add a “Cost resource” and add travel cost manually, but it would be the same effect (manual calculation).
Are there any ideas on how it can be improved?
One of the issues my management has is that they don’t like idea of effective rate, as they want to see travel costs separately from hourly rate to be shown in overall “resource usage” table
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Thank you Evgeny.
If you will meet problems that are hard to solve with the usual project management software tools please post them at "Let's Challenge Spider" thread in Spider Projject forum.
I am still looking for special cases that could be missed in Spider engine.
Best Regards,
Vladimir
Anyone knows resource cost vary with time, due to inflation and other reasons such as the one you just mentioned. To model this variation most probably your software has cost periods where you enter how the unit cost escalate with time.
Of course there are other ways to skin a cat but for this purposes this simple method shall be enough. Be careful with cumbersome methods that might yield unexpected resource assignments, keep it simple.
Modeling idle time and idle costs such as the time between activity 1 and 2 is another interesting issue, easy for Spider but wonder about MSP. For fun just add overtime rate while traveling.
Maybe Red Zone Travel shall be increased to 400.00$/hr .... :)
Vladimir,
your answer is quite extensive one, thank you. In fact I have just set my long ongoing task to play around with Spider higher priority, than it had before.
For a short term though, I am still checking whether somebody will come up with some other approach, in compare to what I am using, to calculate travel costs.
In Spider you can create any number of cost components including those that depend on others and calculated by formulas.
You can also create project reference-books - a set of databases with the corporate norms.
Costs are assigned per unit of time, per physical unit of work volume (cm, kg, etc.), or fixed (independent of time and work).
One of these reference-books can be assignment properties.
In your case you shall define per diems and transportation for each day, plus fixed (return ticket) for each assignment type in the reference-book.
The reference-book may contain many assignment types depending on costs for different travel destinations. Applying reference-book all costs will go into the project model and if you will change them in the reference-book costs assignment costs will be changed for all future events.
It is more complicated with hotel cost because it is not proportional to the work duration. Simple work around - to apply formula.
Enter hotel day cost in the user field (also through the reference-book) and when it was copied into the project model multiply it by (number of assignment days minus one) by formula. I suggest to create separate cost component for hotel cost and the result of formula to be written as fixed for assignment.
Besides, in Spider Project you can create cost centers, grouping cost components. In our case group Travel Cost will be a sum of Transportation and Hotel costs.
Did I answer your question or something is missed?
Is there any other way to plan travel costs, may be not with MS Project, (preferably automatically)?
How others are doing it?
In ideal case I would like to be able to setup some rules, that for instance if I assign Field Engineer to work from Mon to Thu, then the system would also add a cost of return ticket plus 3 hotel costs, plus per diems and transportation for 4 days.
Vladimir, how is Spider doing this?
"One of the issues my management has is that they don’t like idea of effective rate, as they want to see travel costs separately from hourly rate to be shown in overall “resource usage” table"
Of course!
And certainly it is necessary to analyze not only total cost, but its components, like cost of materials, cost of machines, travel expenses, indirect costs, etc.
Hi Evengy
You are on the right track but instead of a simple task use a summary bar or hammock of the tasks that affect the PM and put the costs on that.
The costs will change automatically as the programme shifts.
Best regards
Mike Testro
Email: PPadmin@planningplanet.com
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